United States: DC Employers – On Your Marks, Get Set, Go!: Universal Paid Leave Tax Starts Soon

Last Updated: May 16 2019
Article by Donald C. Davis

District employers, get on your marks! We told you way back in 2017 that Universal Paid Leave (UPL) would be coming to the District, and here it is. Under the DC Universal Paid Leave Act (the Act) and its implementing regulations, beginning on July 1, you will be liable to pay a 0.62% tax on your employees' gross wages for the preceding quarter, the first quarterly payment of which must be made by July 31, 2019. That means you should contact your payroll administrator now, to make sure you're ready to comply. In this post, we outline the key details about the new payroll tax, including how to pay it, and refresh your memory on the other key provisions of the Act.

The UPL Payroll Tax: Your Questions Answered

How Does the Tax Work?

If you directly or indirectly employ or exercise control over the terms and conditions of employees working in the District and you are required to pay unemployment insurance on behalf of your employees, then you are a "covered employer" under the Act, regardless of whether you have a physical location in the District, and regardless of the number of employees you employ in the District.

The Act creates a paid leave system funded by employers for those employed in the District. You are not permitted to collect any portion of this tax from your employees through payroll deduction or otherwise, and the payroll tax is in addition to any other payroll taxes or benefits you provide to your employees.

As a covered employer, you will be required on a quarterly basis to file a report and contribute to the UPL Implementation Fund an amount equal to 0.62 percent of the gross wages you paid your District employees during the quarter. The tax will be computed on wages paid beginning April 1, 2019. Then, beginning on July 1, 2020, eligible individuals taking a qualifying leave may file a claim with the DC Department of Employment Services (DOES) for paid leave benefits, with those benefits to be paid out of the fund comprised of the UPL taxes collected from all employers, and managed by the DC government .

Because the Act's definition of wages borrows the definition of wages from the DC Unemployment Compensation Act, "wages" is defined as "all remuneration for personal services, including commissions and bonuses and the cash value of all remuneration in any medium other than cash." This tax collection process will be similar to the collection of unemployment taxes (which is also conducted on a quarterly basis.)

You must report and pay the contributions for a quarter no later than the last day of the month that follows the close of each calendar quarter. That means your first report and payment will be due no later than July 31, 2019.

If you employ five (5) or more covered employees, you must register to report and pay through the online portal with DOES. If you have fewer than five covered employees, you may use the portal or, if you do not have access to a computer, you may request from DOES to register on a paper form. DOES will maintain a separate account for each covered employer and credit your account with all contributions you pay beginning on July 1, 2019 and thereafter. Because this account will be maintained by DOES for accounting purposes only, it will not impact the rights of covered employees to UPL benefits. You will be able to update your account with your current address, contact information, and business status, and you will be able to use the account to submit your quarterly wage reports and tax payments electronically.

What Happens If We Don't Comply?

If you miss the quarterly deadline or otherwise fail to pay a contribution when due, interest at the rate of 1.5 percent per month will accrue and be assessed against you until you pay the past-due contribution. In addition, you face penalty of 10 percent of the amount due if you fail to make the payment or file the report. The tax regulations promulgated under the Act authorize DOES to proceed with collection activities against you if you fail to comply, including levying your bank account(s) and seizing and selling your property.

What are Our Next Steps for Right Now?

  1. Contact your payroll administrator to ensure they're prepared for compliance. Compliance is mandatory and the penalties can be stiff for non-compliance, so stay on it!
  2. Now is a great time to review your leave programs policies and practices to determine whether they're still right-sized for you and whether you're accounting for the interaction of different leaves in line with your objectives. Consider whether you may want to amend those policies to address the availability, beginning next year, of paid leave under the UPL.
  3. Keep reading below to refresh your memory on the other requirements the Act places on you and your employees.

Universal Paid Leave Act Refresher

Because it has been a while since we last explained how the Act works, here are some key points about UPL to refresh your memory.

Which of Our Employees are Eligible for UPL?

A "covered employee" is an employed individual who spends more than half of her work time working for a covered employer in the District. Thus, even if you don't maintain an office in the District but employ residents of the District who perform services for you in the District at least half of the time, you're on the hook to help fund UPL.

An "eligible individual" is an individual who has been a "covered employee" during some or all of the 52 calendar weeks immediately preceding the qualifying event for which paid leave is being taken.

How Will UPL Work for Our Employees?

Your employees will be able to take UPL for any of these three reasons:

  1. Parental paid leave. An eligible employee is entitled to up to eight weeks of paid parental leave, which may be taken within one year following the birth of a child, placement of a child for adoption or foster care, or placement of a child where the eligible individual legally assumes and discharges parental responsibility.
  2. Family paid leave. An eligible employee is entitled to up to six weeks of paid family leave under the act so the employee can provide care or companionship to a family member who has a diagnosis or occurrence of a serious health condition.
  3. Medical paid leave. An eligible employee is entitled to two weeks of paid medical leave following his or her diagnosis or occurrence of a serious health condition.

The Act broadly defines "family member" to include:

  • A biological, adopted, or foster son or daughter; a stepson or stepdaughter; a legal ward; a son or daughter of a domestic partner; or a person for whom an eligible individual stands in loco parentis.
  • A biological, foster or adoptive parent; a parent-in-law; a stepparent; a legal guardian; or another person who stood in loco parentis to an eligible individual when the eligible individual was a child.
  • A person to whom an eligible individual is related by domestic partnership or marriage.
  • A grandparent of an eligible individual.
  • A sibling of an eligible individual.

Similar to the federal and the District's Family and Medical Leave Act (FMLA), to qualify for family or medical paid leave, an eligible employee must show that a "serious health condition" exists. A "serious health condition" is a physical or mental illness, injury, or impairment that requires inpatient care in a hospital, hospice or residential health care facility, or continuing treatment or supervision at home by a health care provider or other competent individual.

Employees may begin to access paid leave beginning July 1, 2020. Eligible employees with a weekly wage at a rate that, on an annualized basis, is equal to or less than 150 percent of the District's minimum wage (which will rise to $15.00 per hour effective July 1, 2020) will be entitled to payment of benefits at a rate that equals 90 percent of that eligible individual's average weekly wage rate. Eligible employees earning in excess of 150 percent of the minimum wage will be entitled to 90 percent of 150 percent of the District's minimum wage, plus 50 percent of the amount by which the eligible individual's average weekly wage rate exceeds 150 percent of the minimum wage, with a maximum weekly benefit capped at $1,000. The $1,000 weekly benefit cap will increase in proportion to the annual average increase, if any, in the Consumer Price Index beginning October 1, 2021.

An eligible employee may submit a claim for payment for any period during which she does not perform work because of a qualifying event. Employees will not be entitled to receive payment for more than one qualifying event in any 52-week period.

An eligible employee who wishes to access this leave must provide you with written notice of the need to use paid leave. The written notice must include: (1) a reason for the absence (as long you don't require details that would violate the employee's right to privacy under the Health Insurance Portability and Accountability Act of 1996 (HIPAA)), and (2) the expected duration of leave. If the leave is foreseeable, the employee must give written notice at least 10 days, or as early as possible under the circumstances, before the start of leave. If the leave is not foreseeable, the employee must provide oral or written notification prior to the start of the work shift for which she asserts the need for leave. In case of an emergency, the eligible employee (including through someone authorized by her to notify you) must notify you either orally or in writing within 48 hours of the emergency.

DOES will notify you within three business days that your employee has filed a claim for UPL. Within 10 business days after the claim is filed, DOES will make an initial determination of the claimant's eligibility to receive benefits, the weekly amount payable, the week when payments will commence and the maximum duration of benefits. DOES will notify the claimant and also advise her of the right to appeal to the Office of Administrative Hearings if she does not agree with DOES' determination. Payment of benefits will begin within 10 business days of DOES' determination of the claimant's eligibility and subsequent payments will be made on a bi-weekly basis.

Do We Have to Give Notice to Employees?

You must post a notice of UPL rights at each worksite in a conspicuous place or in a place where you customarily post notices. You must also send the notice to remote covered employees in the District. Further, you must provide the notice to employees at the following times:

  • To an individual employee within 30 days of hiring.
  • To all employees annually.
  • To an individual employee at the time you receive notice from the employee that leave for a qualifying event is needed.

Because you carry the burden of demonstrating compliance with the notice requirements, you should retain email receipts and signed acknowledgments by employees proving that you delivered the required notices. A penalty of up to $100 per employee, per day may be assessed against you for failure to comply with the notice requirements.

What Records Must We Keep?

You must generate and keep certain records related to UPL for three years:

  • The name and social security number (or if the social security number is unavailable, tax identification number) of each covered employee.
  • The beginning and ending dates of each pay period.
  • The wages paid for each pay period, including the cash value of other remuneration, gratuities, and tips and expenses incurred by each covered employee for which a deduction from wages is claimed.
  • Method of payment.
  • Earnings of employees.
  • The dates on which wages were paid.
  • Dates of parental, medical and family leave taken by employees.
  • Copies of employee notices of leave furnished to the employer.
  • Copies of all written notices given to employees as required under the act.
  • Documents describing employee benefits, including short-term and long-term disability policies, sick leave, vacation leave, and other employer paid and unpaid leave policies and practices.
  • Records of disputes between you and any employee regarding UPL

How Does UPL Interact With Leaves?

If an eligible employee's UPL also qualifies as protected leave under the federal Family and Medical Leave Act or the DC FMLA, the employee's UPL period will run concurrently with (not in addition to) the other leave period. The Act does not provide any job protections other than those already provided by DC FMLA.

It remains your prerogative to provide employees with leave benefits beyond those provided by the Act. If you do so, know that you must still comply with the Act, including payment of the tax. You may be wise to take this opportunity to review and update your leave policies to prevent the unintended consequence of "double dipping" by employees who may qualify for both UPL and paid leave under your policy.

If an eligible employee is receiving unemployment insurance benefits or long-term disability benefit payments, he or she is not eligible to receive any UPL benefit payments.

Can Our Employees Sue Us Over This?

Within one year after the occurrence or discovery of a violation of the act, an employee can sue you to enforce the Act's provisions. In addition, the DC Attorney General or Mayor may bring an enforcement action against you.

If a court determines that you violated the Act, the remedies available under the DC Family and Medical Leave Act (DC FMLA) will apply, which include lost wages, benefits or other compensation, plus interest, as well as liquidated damages and reasonable attorney fees and costs.

Also, keep in mind when fashioning an employment, separation, or settlement agreement with an employee that the Act prohibits any waiver of rights under the Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Masuda, Funai, Eifert & Mitchell, Ltd.
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Masuda, Funai, Eifert & Mitchell, Ltd.
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions